1. (SBU) SUMMARY: A short-lived experiment by a Nike supplier in
Guangdong to employ 1,200 Uighur workers will end the last week in
August when the 193 remaining Uighurs return to Xinjiang at the end
of their year-long contract. Though some Uighur workers had
considered extending for another year of work, all decided against
it after the recent disturbances involving Uighur migrant labor in
Shaoguan, Guangdong, and events in Urumqi. Local authorities have
assigned officials to monitor the factory's Uighurs and have stepped
up police presence around the factory. Representatives of the
Xinjiang Uighur Autonomous Region (XUAR) government or local
governments in Xinjiang have accompanied the Uighur workers since
their arrival in south China and will return with the last of the
workers. After significant investments of time and money into the
program, factory management is disappointed by the departure of the
Uighurs, whom it had hoped to employ long term. In response to May
2009 media allegations of child labor at the factory, managers and a
Nike representative described their system for ensuring all workers
are at least 18 years old. END SUMMARY.

"By next week, they will all be gone"
-------------------------------------

2. (SBU) "Their contract has ended, and though some [Uighurs] had
considered extending for another year, after the Urumqi riots
everyone decided to leave," said Dean Shoes Business Director Ronald
Hui. Dean Shoes, a major supplier for Nike, experimented with
employing up to 1,200 Uighur workers at their Huizhou-based factory
from March 2008 until August 2009. Hui said the Uighurs' decision
to return to Xinjiang instead of continuing to work for Dean
appeared largely to be based on a desire to be with their families
following the July unrest in Urumqi. Hui also said that a number of
Uighur workers had told him they felt unsafe after violent incidents
in Shaoguan, Guangdong, and Urumqi. As of late August, only 193
Uighur workers remained at Dean's factory.

3. (SBU) Huizhou municipal government interest in Dean's Uighurs
intensified following the June 26 factory riot in Shaoguan and the
July 5 and 7 riots in Urumqi (reftels), according to a Dean manager,
who said that local authorities had "practically lived at the
factory" since then. (Note: No Huizhou authorities were observed
during the August 20 factory tour. End note.) Police patrols have
increased around the gate of the factory, which itself is located
approximately twenty meters from a police substation, said the
manager. Interest in the Uighur situation goes all the way to the
top of the city's government, according to Hui. "Before 7/5 [the
July 5 Urumqi riots], I had never met the Huizhou mayor. Now I see
him more than my own wife," he said.

Government "Coaches"
--------------------

4. (SBU) As part of Xinjiang's labor transfer program, approximately
every hundred workers are shepherded by a representative from the
Xinjiang Uighur Autonomous Region (XUAR) government. These
"coaches," as they are called, primarily serve as interlocutors
between the Uighur workers and management. According to Hui, a
Uighur-speaking coach is available by phone around the clock if
needed by a Uighur worker. The last remaining three coaches -- two
Han Chinese and one Uighur -- explained that their role was to
assist the Uighurs both with work-related issues and with keeping in
touch with their families in Xinjiang. When asked what effect the
Urumqi riots had on these Uighurs, one of the government-appointed
coaches claimed, "none at all." (Comment: The XUAR coaches'
comments, which contradicted those made by the factory manager, were
likely edited for the benefit of a U.S. government audience. End
comment.)

Efforts To Integrate And Accommodate
------------------------------------

5. (SBU) When Uighurs first arrived at the Dean factory March 11,
2008, Han workers' initial complaints were that Uighurs were "not
smart enough" to do factory work, that their hygiene practices were
insufficient and that they could not speak Mandarin Chinese,
according to Hui. In response, Dean trained workers and management

GUANGZHOU 00000510 002 OF 002

on dealing with cultural and religious differences, said Hui. At
the same time, Uighur workers availed themselves of Mandarin Chinese
language lessons provided by Dean. Although none of the Uighurs
attained high-level fluency in Mandarin during their year at the
factory, many Uighur workers were able to hold simple conversations
with their Han coworkers and supervisors, said Hui. Perceptions
that Uighurs were not smart enough for factory work quickly
dissipated as the new workers learned their jobs and adjusted to the
factory routine. Even the hygiene issues, said Hui, were largely
resolved over time.

6. (SBU) Dean originally signed the Uighurs to a two-year contract,
but later acquiesced to the one-year contracts the Uighurs signed
with the XUAR government. Steps taken by the factory to accommodate
the Uighurs included a halal kitchen equivalent in size to the
kitchen preparing Chinese food, Uighur-only dormitory rooms, Chinese
language classes, religious holidays in addition to national
holidays and access to a Xinjiang television channel and newspapers.
Signs throughout the compound were trilingual: Chinese, English and
Uighur. Most of the Uighurs worked in a full range of normal
manufacturing jobs, excluding those which required more advanced
Mandarin to read chemical safety labels. When asked if he would
consider trying the experiment again in the future, Hui said, "Maybe
in five or ten years. Right now this is a political issue for the
local government, but over time there might be other opportunities."

7. (SBU) A May 2009 Radio Free Asia (RFA) article singled out Dean's
Huizhou operation as a destination for underage Uighur migrant
workers. Both Nike and Dean made clear that individuals under 18
would not be allowed to work in the factory. As part of the
program, the Xinjiang Government agreed to screen all Uighur workers
to confirm that they were at least 18. (Note: The legal working age
in China is 16, but it is Nike company policy that contractors only
employ people 18 or older in footwear factories. End note.) Upon
arrival at the factory, Dean used a computer program to again verify
workers' ages against their second-generation identification cards,
said Hui. A number of workers did not have second-generation cards,
and so carried additional paperwork issued by authorities in
Xinjiang attesting to their age. A Nike corporate social
responsibility (CSR) representative noted that 70% of the Uighurs
had normal bank accounts, which indicated an additional verification
of their identity. The other 30% managed their money through
savings cooperatives or via government or commercial money
transfers.

8. (SBU) Neither Nike nor Dean executives would speculate on how
workers might acquire legitimate false identification documents
before departing Xinjiang. Nike and Dean both expressed concern
that there were few options to identify underage workers bearing
government-issued identification showing them to be older than they
actually were. The Nike CSR representative said that, in exit
interviews with departing workers, some ethnic Han workers would
occasionally claim that they had been 16 or 17 when hired using
false or borrowed documents, but were already 18 or older at the
time of the exit interview. Hui noted that Dean pays Shenzhen's
minimum wage (CNY 900 per month; approximately US$131) instead of
the local minimum wage (CNY 580; approximately US$85) and finds it
comparatively easy to attract workers.

Uighur Workers: A Good Place To Work, But Excited For Home
------------------------------------ ---------------------

9. (SBU) PolOff discussed working conditions and future plans with
Uighurs at the factory compound. One young woman who spoke with
heavily accented but understandable Mandarin Chinese and, eschewing
the headscarf and donning the same fashion of dress popular with
young Han Chinese factory workers, characterized the factory as "a
good place to work." Nonetheless, the worker said she looked
forward to returning to her home in Xinjiang and seeing her family
again. She was unsure what she might do for employment after her
return.